FEATURE-Can-do Najaf offers hope for Iraq investment boom

May 02, 2012|Reuters

Rising tensions within Iraq's fragile coalition governmentof Shi'ites, Sunnis and Kurds has hampered work and delayedapproval of many laws, such as a long-anticipated hydrocarbonslaw which is crucial for the oil sector.

Policy-making is also paying the price of decades ofeconomic isolation. Many officials are unused to moving at thespeed demanded by foreign investors, and even when newlegislation is passed, it can take months to be understood andimplemented within the government.

Bahash says the key to Najaf's success has been closecooperation between the province's investment commission and thelocal governate, with officials taking the initiative to tackleproblems rather than wait for a national directive.

"The governor and members of the provincial council arecooperating with us; they support our investment steps, and thathas not happened in other provinces," Bahash said.

Razzaq Shareef, deputy governor of Najaf, said the provincehad seen so many projects take off because it had a strictpolicy that any investor granted a licence had to pay 10 percentof the project's costs upfront as a guarantee that it would meetits commitments.

The rule has proved successful with both local and foreigninvestors, and is now being rolled out in other provincesfollowing an order from the central government, Shareef said.

Iraq has a target under its five-year economic developmentplan of attracting $85 billion in investment by 2014. Luringpledges of that amount of money looks likely to be relativelyeasy; translating them into concrete projects on the ground mayrequire educating many more government officials in Najaf'sapproach.

"The help from the central (government) is limited in thisfield," said Anbar investment commission head Awadh. "Someofficials don't even understand the culture of investment. Evenat the level of a minister."